Potentially Sticky Issues Anticipated in Coming General Assembly Session

Few anticipate General Assembly sessions with glee. Most approach them with caution. Architects fall into the latter group.

Why? Because architects are licensed by the state, regulated by the state, and often find their fate affected by the state. In the upcoming session, the Joint Legislative Committee and its legislative counsel anticipate a few sticky issues arising.

Among the most likely will be swapping the ever unappealing business, occupational and professional license (BPOL) gross-receipts tax for a tax on services and another attack on the Virginia Public Procurement Act (VPPA) and its provision for qualifications-based selection of professionals.

Early discussions indicated that a tax swap would aim to be revenue neutral. This means that revenues from a service tax would be designed to equal the revenue raised from the BPOL tax. The difficulty is that the BPOL tax is a local tax, assessed, collected and allocated as the locality wishes. The state establishes the maximum rate for each business class — 58 cents per $100 of receipts for architects — and the locality may set its assessment anywhere from zero, as several do, to the maximum.

Through the VPPA, the General Assembly in the early 1980s required for all public bodies a different method for procuring professional services. For goods and non-professional services, price could be the determining factor. For professional services, the public body — state agencies; quasi-public authorities; school boards; cities, counties and towns; etc. — must first determine what firms are qualified without consideration of price.

To do this, public bodies are required to request proposals that describe the professional firm’s methods and capabilities for handling a specific project or project type. The initial request for a proposal cannot ask for fee information. In this way, the public entity can trim the list of potential providers to only those it believes are most qualified.

At that point, the agency or locality begins to discuss the details of the project, outlining, defining, and refining the specific scope and limitations of what is expected of the professional firm. When that scope is suitably understood and agreed upon by both the agency or locality and the firms, the firms are ranked.

The public entity then begins negotiations with its top-ranked firm. If a suitable price cannot be reached, negotiations are formally ended and negotiations begin with the second-ranked firm.

The federal government and most state governments have employed this system for decades as it has proved the best system to provide transparency in the procurement process and lessen the chances of favoritism.

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